Choice Properties Real Estate Investment Trust ($CHPUN)

Good day, and thank you for standing by. Welcome to the Choice Properties Real Estate Investment Trust Annual Meeting of Unitholders. Please be advised that today's meeting is being recorded. I would now like to hand the meeting over to your speaker today, Gordon Currie. Thank you. Please go ahead.

Good morning, and welcome to the 2026 Annual Meeting of Unitholders of Choice Properties Real Estate Investment Trust. I'm Gordon Currie, and I serve as Chair of the Board of Trustees. It is my pleasure to welcome you to our Annual Meeting of Unitholders. For this year's virtual AGM, our goal is to once again approximate the experience of a meeting held in person, including the opportunity to participate in the meeting and for unitholders and proxy holders to vote and ask questions. I am joined today on the webcast by Rael Diamond, our President and Chief Executive Officer and a member of the Board; Erin Johnston, our Chief Financial Officer; and Simone Cole, our Senior Vice President, General Counsel and Secretary. Other members of the Board of Trustees and senior management team are also attending remotely. I would now like to call to order this Annual Meeting of Unitholders. I will begin today's meeting by outlining how voting and questions will be addressed. Voting during today's meeting will be conducted through the online platform. When we are ready to table an item of business for a vote, you will see voting options appear on your screen. Usually, and this year is no exception, the majority of unitholders have submitted their proxies or voting instructions in advance of the meeting. I wish to thank all those unitholders who exercised their right to vote in advance. If you have voted in advance of the meeting by submitting a proxy and do not wish to revoke your vote, then you do not need to do anything. The scrutineers will tabulate all the votes cast during the meeting, and we will report on the results of each resolution at the end of the meeting. If you wish to submit a question in writing, select the messaging tab on the top of your screen. To ask a verbal question, click on the request to speak icon at the top of the broadcast. When submitting a question, please identify whether it relates to a motion being considered as part of the formal business of the meeting or whether it is general in nature. We will address questions directly related to a particular motion at the appropriate time of the meeting. And we will save general questions until after the formal business has been completed. Simone Cole, our Corporate Secretary, will receive and read the submitted questions and either I or a member of the management team will respond. If you are logged into the meeting as a guest, you will be able to listen to the meeting, but you will not be able to vote or ask questions as only registered unitholders and duly registered proxy holders may do so. I will now proceed with the formal part of the meeting. I would ask Simone Cole to act as Secretary of the meeting. TSX Trust Company is acting as scrutineer of the meeting by way of its representatives, Emma McKenzie and Lori Grinton. Only unitholders of record at the close of business on March 16, 2026, or their duly appointed proxies are entitled to take part in and vote at this meeting. To make the best use of our time, certain unitholders have been asked to move and second the motions, which are called for in the notice of meeting. A copy of the notice of meeting and proof of its mailing have been filed with the records of this meeting. The scrutineer's report indicates that a quorum is present. I now declare that this annual meeting has been properly called and is duly constituted for the transaction of the business for which it has been called. Today's agenda will begin with remarks from the Choice Properties management team. These will be followed by the submission of the 2025 annual financial statements, followed by three resolutions: first, to elect the Board of Trustees; second, to appoint Choice Properties external auditor for fiscal 2026 and to authorize the trustees to fix the external auditor's remuneration; and third, to consider an advisory resolution on Choice Properties' approach to executive compensation. At the conclusion of the formal items of business, we will move to our general question-and-answer period and the announcement of voting results. I would now like to bring your attention to the notice appearing on the screen. On behalf of those speaking today, I would like to note that today's remarks may include forward-looking statements and references to non-GAAP financial measures. Actual results could differ materially from the forecast, projections and conclusions in the forward-looking statements. Details regarding forward-looking statements and non-GAAP measures can be found in Choice Properties 2025 annual report as updated in the 2026 first quarter report to unitholders. I should also note that during the meeting, we may pause from time to time to review messages from the Secretary. Thank you in advance for your patience as we do so. Before I hand things over to Rael, I'd like to take a moment to reflect on 2025 and acknowledge the efforts of the team at Choice Properties over the last year. 2025 was another year of positive momentum for our business as we significantly advanced our strategic agenda, continued to demonstrate the stability of our portfolio and strength of our balance sheet and made meaningful progress on our transformational development pipeline. Looking ahead, we are excited about the potential for closing of the previously announced transaction to acquire best-in-class assets from First Capital. This transaction provides Choice with the opportunity to drive long-term growth and value to unitholders, solidifying Choice as Canada's leading REIT. As Board Chair, I'm proud of our ability to deliver strong financial and operating performance and progress on our commitments to all stakeholders. I am confident in the team at Choice Properties and look forward to building on our positive momentum in 2026. I would now like to call upon Rael and Erin to present an update on the business.

Thank you, Gordon. Good morning, everyone. We are delighted to have you join us for our 2026 Annual Meeting. We are proud to have achieved another year of strong operational and financial results in 2025. Our performance demonstrated the strength of our necessity-based retail portfolio, our well-located industrial portfolio and our ability to create value through development. Together, these factors enabled us to deliver on our strategic priorities and meet our financial outlook. We also continue to strengthen our foundation, which includes our industry-leading balance sheet, our commitment to ESG, our strategic relationship with our largest tenant, Loblaw and our talented team. As a result of the strength and stability of our business, we were pleased to announce our fourth consecutive annual distribution increase in the first quarter of 2026, demonstrating our commitment to sharing earnings growth with our unitholders. In 2025, we further optimized our portfolio, completing $801 million of real estate transactions, including $460 million of acquisitions and $340 million of dispositions. We also continue to create value through development, transferring 17 new commercial projects totaling 836,000 square feet, which included the latest industrial phase at Choice Caledon Business Park. These projects were completed at an average yield of 7.4% and resulted in $47 million of value creation. As one of Canada's largest real estate companies, we have both the scale and the responsibility to make a meaningful impact for our people, our communities and the environment. 2025 was an important year for our ESG strategy. It was the first full year of our 3-year climate action road map and it marked a clear shift from commitment to delivery. We made real progress toward our net zero 2050 goal, expanded our social impact and place-making initiatives across the country and continue to embed ESG into how we run the business. I encourage you to read our 2025 ESG report available on our website. Looking across our business and our three strategic asset classes, our market-leading portfolio of necessity-based retail, industrial and mixed-use and residential is in exceptional shape. Throughout 2025, leasing activity remains strong across our commercial properties, supported by the location and quality of our assets and depth of our tenant relationships. Our 44.5 million square feet retail portfolio delivered strong tenant demand and steady cash flow growth. Grocery-anchored necessity-based centers performed exceptionally well with strong leasing spreads and portfolio occupancy reaching 98% at year-end. In industrial, market conditions stabilized for high-quality assets in key locations. Our 22.2 million square foot portfolio remained highly resilient, ending the year at 98.8% and performed in line with expectations. Across the portfolio, we continue to benefit from the significant mark-to-market on our in-place rents. Lastly, in our mixed-use and residential portfolio, we delivered stable performance in 2025, reflecting the high quality of our office assets, which are primarily leased to affiliate entities. While select residential properties have experienced some pressure from new supply, they continue to benefit from strong long-term fundamentals in urban markets. Looking ahead to 2026, our business and portfolio are well positioned to withstand different economic cycles. Our disciplined approach to capital allocation and our prudent financial management provides us the capacity to continue pursuing exciting growth opportunities such as the one we announced two weeks ago. On April 16, we announced the acquisition of approximately $5 billion of urban necessity-based retail properties as part of a take-private transaction of First Capital REIT with our partner, KingSett Capital. We're exceptionally excited about this transaction and what it means for our unitholders. This portfolio includes 101 high-quality properties located in some of the strongest markets in Canada. The transaction will meaningfully enhance our overall retail portfolio by increasing our exposure to urban markets and higher growth ancillary tenants. This transaction also improves our scale and capital markets presence, further solidifying Choice as Canada's leading REIT. The transaction is subject to regulatory approvals. We expect it to close in the second half of the year and we will provide updates to all unitholders as we progress towards closing. Finally, I want to express my thanks to our colleagues. Everything we achieved this past year would not have been possible without your contributions. I'm particularly proud of our extremely collaborative culture here at Choice and our ability to deliver exceptional partnership and service to our tenants. I'll now pass it over to Erin to provide an update on our financial position and development program.

Thank you, Rael. We were very pleased with our financial performance in 2025, having achieved each of our financial objectives. While the economic environment was highly uncertain when we set our outlook at the beginning of 2025, the fact that we met each of our core financial targets underscores the quality and resilience of our portfolio and our team's ability to deliver consistent results for unitholders. Supported by the strength of our portfolio, tenants and team, in 2025, we maintained our high occupancy, ending the year at 98.2%. For the full year, same-asset cash NOI increased 2.2%, and we delivered total NOI growth of 4.7%, supported by our development deliveries and net acquisition activity. Funds from operations grew 3.6% year-over-year to $1.069 per unit and NAV per unit increased to $14.43 per unit, resulting in year-over-year growth of 2.6%. Turning to our developments. Our pipeline continues to be a reliable source of long-term cash flow growth and NAV creation for the REIT. In 2025, we invested $237 million in development and successfully transferred $222 million of assets to income producing, representing 836,000 square feet of new commercial GLA. These transfers resulted in approximately $47 million of value creation. Beyond our 2025 deliveries, our team continued to advance the rest of our pipeline. At the end of 2025, we had 14 active development projects totaling 1.4 million square feet. This is in addition to the 17.4 million square feet of projects currently zoned and in planning. This development pipeline continues to provide us with a meaningful opportunity to add high-quality real estate to our portfolio. Last year, we continued to demonstrate prudent financial management, ending 2025 in a solid financial position with strong debt metrics and ample liquidity. Our adjusted debt-to-EBITDA was 7x, and we maintained a strong liquidity position with $1.6 billion of available liquidity through our corporate facility and cash on hand and approximately $13.8 billion of unencumbered properties. We maintained our balanced maturity ladder and extended our weighted average term to maturity to 6.5 years at the end of 2025. Touching for a minute on our recently announced transaction. Our industry-leading balance sheet remains a key part of our strategy, allowing us to pursue opportunities such as the First Capital portfolio acquisition. At closing of the transaction, our pro forma adjusted debt-to-EBITDA will be approximately 8.5x on an annualized basis. Our management team has a well-established track record of deleveraging following major transactions, and we are committed to reducing leverage to our long-term target of 7.5x following the closing of the transaction. Overall, our 2025 performance demonstrates our ability to deliver stable and consistent growth, and our balance sheet continues to provide us the financial strength and flexibility to navigate challenges, seize opportunities and support our development pipeline. As we look ahead, we are positioned well to deliver on our financial plan and strategic priorities. On behalf of Choice Properties, we thank you for your continued support and confidence. I would like to welcome Gordon back to address the meeting. Thank you.

Thank you, Rael and Erin. I would now like to move to the first item of business and submit the annual audited consolidated financial statements of Choice Properties, together with the notes and the auditor's report to the unitholders for the year ended December 31, 2025. These are included in the annual report, which was provided to unitholders and can also be retrieved from the Financial Reports section of Choice Properties' website or from SEDAR+. Simone, were there any questions or comments submitted in connection with this item?

No, Gordon. We have not received any questions related to this item.

Thank you, Simone. We'll now move to the three matters to be voted upon at this meeting. There are 11 nominees standing for election at this meeting. Our management proxy circular contains detailed biographies setting out the qualifications and backgrounds of the nominees. To facilitate the introduction of the nominees, I refer you to the slide on the webcast. I declare the polls open on all resolutions. Simone, were there any questions or comments submitted in connection with the nomination and election of trustees?

No, Gordon. We have not received any questions related to this item.

Thank you. I have taken the liberty of asking certain unitholders to make the motions for the matters to be voted on today. Could I please have a nomination for the election of trustees?

My name is Rose Tassone, and I am a unitholder. Mr. Chairman, I nominate the following persons for election as trustees of Choice Properties to hold office until the next Annual Meeting of Unitholders or until they resign or their successors are duly elected or appointed. L. Jay Cross, Gordon A.M. Currie, Rael L. Diamond, Diane Kazarian, Karen Kinsley, R. Michael Latimer, Nancy H.O. Lockhart, Dale R. Ponder, Jan Sucharda, Qi Tang, Cornell Wright.

My name is Kate Hutchinson, and I'm a unitholder. Mr. Chairman, I second the motion.

Thank you. Choice Properties' Declaration of Trust requires that nominations of trustees by unitholders be received by the trustees at least 30 days in advance of the meeting in order to be valid. As no further nominations were received prior to the deadline, the nominations are closed. Rose, could you move a motion to that effect?

Mr. Chairman, I move that nominations be closed.

Mr. Chairman, I second the motion.

Thank you. If you have not already done so, I would ask unitholders or their appointees to cast their votes through the online portal. As a reminder, if you have already voted or sent in your proxy, there is no need to do anything unless you wish to change your vote. We'll now move to the appointment of the auditor and the authorization of the trustees to fix the auditor's remuneration. Simone, were there any questions or comments submitted in connection with the appointment of the auditor?

No Gordon. We have not received any questions related to this item.

Thanks, Simone. I will now entertain a motion for the appointment of the auditor and the authorization of the trustees to fix the auditor's remuneration.

Mr. Chairman, I move that PricewaterhouseCoopers LLP be appointed auditor of Choice Properties until the next Annual Meeting of Unitholders of Choice Properties and that the trustees be authorized to fix the auditor's remuneration for the 2026 fiscal year.

Mr. Chairman, I second the motion.

Thank you. If you have not already done so, I will ask unitholders or their appointees to cast their votes through the online portal. The next item of business is the advisory resolution regarding Choice Properties' approach to executive compensation. The resolution is more fully described on Page 21 of the management proxy circular. Simone, were there any questions or comments submitted in connection with this advisory resolution?

No Gordon. We have not received any questions related to this item.

I will now entertain a motion to approve on an advisory basis, Choice Properties' approach to executive compensation.

Mr. Chairman, I move that the advisory resolution regarding Choice Properties' approach to executive compensation be approved.

Mr. Chairman, I second the motion.

Thank you. If you have not already done so, I would ask unitholders or their appointees to cast their votes through the online portal. This brings us to the end of voting on the items of business before this meeting. I therefore declare the polls closed. Thank you for casting your votes. The scrutineers will tabulate the votes cast, and we will report on the results towards the end of the meeting. I would now like to open the meeting for any general questions. We will make every effort to answer all the questions. However, in the interest of time, we will limit the question-and-answer period to 20 minutes. Any unanswered questions will be addressed after the meeting by members of our management team. Simone, have we received any questions?

No, Gordon. We have not received any questions.

Thanks, Simone. As we have not received any questions, we will move to the voting results. We have received the preliminary voting results from the scrutineer on the three items of business. On the election of trustees, the voting results show that each trustee nominee received votes in favor from at least 95% of votes cast. Accordingly, I declare that the proposed trustee nominees have been duly elected to hold office until the next Annual Meeting of Unitholders or until they resign or their successors are duly elected or appointed. On the appointment of the auditor, the voting results show that approximately 99% of the votes cast were in favor of the appointment of PwC as the auditor of Choice Properties. I declare that PwC is appointed the auditor of Choice Properties and that the trustees are authorized to fix their remuneration for the 2026 fiscal year. On the advisory vote on Choice Properties' approach to executive compensation, approximately 96% of the votes cast were voted in favor of Choice Properties' approach to executive compensation. I declare this motion to be passed. The final voting results will be available after the meeting and posted to Choice Properties' website and to -- and to Choice's SEDAR+ profile. As there is no further business, may I have a motion to terminate the meeting?

Mr. Chairman, I move that the meeting terminate.

Mr. Chairman, I second the motion.

Thank you. I now declare the meeting terminated. On behalf of the Board and management, I would like to thank you for taking the time to join us today.

This concludes today's meeting. You may now disconnect. Thank you.